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Lashmar
Posted - 2011.02.05 09:44:00 - [1]
 

Hello everyone,

First off, my background. I've been playing for about 18 months, run level 3's and some level 4's, and manufacture enough for the profits from manufacture alone to pay for my plex each month.

I've always wanted to get into trading though, but each time i get my feet wet, i worry im doing the wrong thing so I'm looking for tips.

I'm talking more of station trading than shipping etc. I know buy low sell high, but I am after a little more information. Is it worth starting in a high volume location (eg Jita) a smaller hub (eg Rens) or in a totally outlying system with hardly any movement? Also does anyone have any advice for things to begin trading? My advice to manufaturers is make rigs - they are cheap to make, cheap to buy the BPO of, can turn a fair profit, and if it all goes wrong you havent invested too much money. Im after a similarly broadish tip of where to begin trading, nothing too specific for obvious reasons.

Also, how does market manipulation work? I understand about buying all of X product up and relisting higher... but if people keep undercutting, you are left with something thats not selling for the high price - unless you buy again, possibly leading to you sitting on a huge stockpile of item not selling?

Any tips or advice would be appreciated. Just how did you all begin? What tatics did you use, what did you learn?

Fly safe

Rakshasa Taisab
Caldari
Sane Industries Inc.
Posted - 2011.02.05 09:57:00 - [2]
 

Depends on how many billions you managed to build up doing those L3 and L4 missions?

If the answer is ZERO, why would you want to do in-station trading?

Lashmar
Posted - 2011.02.05 10:02:00 - [3]
 

The answer is in the region of 800m. I dont want to do station trading now to become a mega rich super trader. I want to do station trading now to actually figure out how it all works and understand it completely, so that then I can work towards making billions - we all have to start somewhere Smile

Ruareve
Posted - 2011.02.05 10:31:00 - [4]
 

I am by no means a trader, but I have found a few things that make me money when I want to spend time on market research. First I put an alt in all of the regions I'm willing to travel to make pickups/sales at. Then I go through items that are price effective for me to ship, pick out what I want and do the same for the return trip. I don't have the capital to do alot more.

I have tried buy orders as well and made good money off that, but I don't want to spend time in a price war right now so I've avoided that. Once I get a freighter and some more capital I'll probably try that again.

As for specific items; rigs, ships, salvage items, minerals, weapons... it's really hard to say what works or doesn't as it changes all the time. Just research, research, and then compare some more. You'll make more from buy orders but you'll have to tie up your funds and it takes longer then smaller profit directly to buy orders.

Lederstrumpf
Posted - 2011.02.05 11:25:00 - [5]
 

Edited by: Lederstrumpf on 05/02/2011 11:28:01
Originally by: Lashmar
each time i get my feet wet, i worry im doing the wrong thing


There's two options: Either know what you do, or go try and error. Active trading will tell you whether you will succeed at what expense. Knowing what you're doing requires some broad insight and oversight and reliable knowledge on how competition will act/react. Don't expect that to be the case, trading involves risks, so take care to spread out and strive for highest profit at minimal risk. Realize risk vs profit is a tradeoff.

I'm a fan of synergy effects. It requires some knowledge about trade goods to become an excellent trader. Everything else is more or less wild guessing. So if you are knowledgeable about producing some stuff, start your trading attempts right there with exactly the same goods. This way you can calculate your risks better than you could trading some yet unknown item. You might find out you're not producing the best item you could.

Another very simple synergy idea is: Never trade what you can not make use of yourself. If the fat and expensive ship you're trying to sell is helping you to get some extra millions compared to some other ship you can not fly: Why shouldn't you take those millions?

If minerals are required to produce stuff it'd make sense to start trading minerals as a producer. You need to be aware of the mineral costs anyway to calculate the costs of the end product you're producing.

Originally by: Lashmar
I know buy low sell high, but I am after a little more information.


Here's a little more information, take care to understand it properly: Buy high, sell low.



Originally by: Lashmar
Is it worth starting in a high volume location (eg Jita) a smaller hub (eg Rens) or in a totally outlying system with hardly any movement?


How can you succeed selling stuff with hardly any movement? All main trade hubs come "in different flavors". Some are loud, some are silent, some remote, some central... if you got no clue at all what you're doing try to avoid systems with active, aggressive experienced traders. If you're near Rens, Rens should be fine. Hek is too small for my taste already. In the end you might tend not to avoid any of them as you can profit from material flow between stations, too (yes, hauling required).


Originally by: Lashmar
Also does anyone have any advice for things to begin trading?


Stuff which tends to get sold fast due to high demand. Avoid the risk of sitting on a pile of stuff you can not sell again.

Originally by: Lashmar
Also, how does market manipulation work?


1.) Become a [quasi] monopolist
2.) Dictate the price / influencing it to go up or down.

Originally by: Lashmar
I understand about buying all of X product up and relisting higher... but if people keep undercutting, you are left with something thats not selling for the high price - unless you buy again, possibly leading to you sitting on a huge stockpile of item not selling?


Buying all of X and relisting is a way to become temporary local monopolist, yes. Depending on how successful you're able to sell stuff during your monopolist phase it'll decide on whether you're successful to have a positive total balance the next time somebody is trying to break into your business which could enable you to buy him out, too.

There's plenty of ways of manipulation. The successful ones have you end up with more than you began with, be it cash or goods or even just market segments. Don't expect people to earn right there and then where they are manipulating. They could earn elsewhere at some later date. Time is a big factor when it comes to manipulations. Sometimes people have to absorb newly produced volume plus stored stock prior to being able to inflict some major effect. And yes, there's ISK trillionnaires playing EVE.

Originally by: Lashmar
how did you all begin? What tatics did you use


I did rent an office in Pakhshi. Right in the middle of 5 different bordering regions. And I did compare prices. I still do.

Lashmar
Posted - 2011.02.05 12:47:00 - [6]
 

Lederstrumpf, thank you for one of the best, most constructive replies I have ever seen on the MD forums. I was braced big time with a fire resistant suit, but I really appreciate you taking the time to answer my thread so thoroughly.

Its interesting what you said about Hek being too small. I found Jita far to large (and experienced) so I'll take your advice and set up in a station mid way between the two.

Also, there were some real gems in your post. Trading something you have knowledge of seems simple, but sometimes needs to be hammered home - the things ive been manufacturing I have made for over a year - I know the cycles and resale values, so of course I should start there, I just couldnt see the wood for the trees.

Ruareve, thank you also for your reply. I did try and get into trading origionally through hauling, but found it not to my taste really. While i know profits can be made from hauling, it just didnt appeal, and I worried too much about being popped while moving things by suicide gankers in high sec.

Thank you both, it's been very informative.

Ruareve
Posted - 2011.02.05 17:53:00 - [7]
 

Originally by: Lashmar
Lederstrumpf, thank you for one of the best, most constructive replies I have ever seen on the MD forums. I was braced big time with a fire resistant suit, but I really appreciate you taking the time to answer my thread so thoroughly.

Its interesting what you said about Hek being too small. I found Jita far to large (and experienced) so I'll take your advice and set up in a station mid way between the two.

Also, there were some real gems in your post. Trading something you have knowledge of seems simple, but sometimes needs to be hammered home - the things ive been manufacturing I have made for over a year - I know the cycles and resale values, so of course I should start there, I just couldnt see the wood for the trees.

Ruareve, thank you also for your reply. I did try and get into trading origionally through hauling, but found it not to my taste really. While i know profits can be made from hauling, it just didnt appeal, and I worried too much about being popped while moving things by suicide gankers in high sec.

Thank you both, it's been very informative.


I'll second your opinion that leder's post was one of the best. Thank you for the information, it will be a great help when I'm ready to take a break from missions and delve into the market.

Tasko Pal
Aliastra
Posted - 2011.02.05 20:46:00 - [8]
 

Edited by: Tasko Pal on 05/02/2011 20:47:14
Originally by: Lederstrumpf


I'm a fan of synergy effects. It requires some knowledge about trade goods to become an excellent trader. Everything else is more or less wild guessing. So if you are knowledgeable about producing some stuff, start your trading attempts right there with exactly the same goods. This way you can calculate your risks better than you could trading some yet unknown item. You might find out you're not producing the best item you could.


This is probably the most important advice of an excellent post.

For example, if you do a lot of missioning, then sooner or later, you're going to come across some item on the market which you think is mispriced, usually against you. If you're thinking "I can't believe someone is buying this for this price" (and you're pretty sure it's not one of those way overpriced buy scams where the overextended buyer has too little isk to support the trade), then that's an opportunity. You can put your own buy order out there for a little more, or pick up a bunch of cheap product and sell to the buy order. That sort of thing.

Usually, this sort of approach leads to piles of goods in a variety of stations. You either need to haul it yourself or pay someone else to haul it. Make sure that any orders you place, you have a strategy for dealing with the result. If you place a region-wide buy order for medium armor reppers, then have a plan for all the low sec transactions you make (and you might pick up a lot, if someone has been doing the same thing and looking to get rid of their low sec stuff).

Originally by: Lashmar


Just how did you all begin? What tatics did you use, what did you learn?


I began by buying ore in a region (and resulting in a pile of small, useless omber in Sinq Laisson that I have to this day). Then I moved to low sec space in Metropolis. There, my corp at the time had a pos which made a little in moon goo. I figured out that ratting loot was sold cheap in those regions and began buying it. So I ratted for a bit to figure out what was common and buy that stuff. About the same time, I started to do courier missions in the same area. This led to a wonderful synergy. I could help fuel the pos, get my loot, and run missions, pretty much at the same time.

Some things led to another. I started making freighters for the corp (in high sec), which required me to buy large amounts of roid minerals. The cheap trit mission thing hit in low sec (Metro was one of the heaviest trit sellers due to the large number of macro missioners in the area). So I had a reason to bring trit out of low sec (I ended up making a lot of covetors and certain trit heavy modules). I got a pure trade alt for camping Jita. Finally, I was getting a lot of good LP from my courier missions so I needed to buy amarr navy tags to get the best LP store modules. I was all over the place. That led to burnout during 2008.

In 2009, I was in Geminate for a few months. I bought rat loot and melted it down to make common bc and bs. I still have a bunch of ships from that in a low sec station to sell off. I lost internet access for over a year, but I did set a massive buy order for some materials (turned out to lose isk by the time I got back).

When I got back, I sold off the stuff I had obtained, bought a freighter and an orca, set up a pos which I had sitting around (I've since taken it down since I don't currently use it), and started trading again. I've dabbled in a number of areas, but currently I have a very focused trade/hauling scheme combined with some PI investments (of which I posted here too many times as it is). I'm definitely a better trader now than I was in 2009.

Mestophoclies
Posted - 2011.02.05 20:47:00 - [9]
 

Sit in Jita, place buy orders, buy stuff, then re-list it on sell orders. Profit comes from the margin. Don't forget to factor in taxes and broker fees in your margin calculations. Good trade skills help a lot, especially the ability to manage a large number of orders, and broker fees, etc. When your margins shrink, fractions of percentages become more relevant.

Don't expect your stuff to sell overnight. Most of my sales come while I'm doing active 0.01 isking. As much as possible, I try not to hold products in volatile markets overnight. Fortunately, the most volatile markets tend to be high volume.

Always scan the market for widening margins. Often when there is a fundamental price move happening in a product, the margin will widen as the buyers and sellers rediscover the support levels. This is your chance to jump in.

Pros: Easy profit, can update market orders while doing other stuff on a second account.
Cons: A lot of clicking, 0.01 isking

Good products:

In general I like to think about the modules/supplies that I need and research them.

Low Capital (< 100m): Low price, Low volume, high margin products. Good examples might be stuff like meta 0-2 tank mods.

Medium Capital (100-1000m): In this range, I like to trade a mixture of modules needed for pvp, and materials needed for construction. Think about what a noob wanting to fly a drake, or any fotm ship would need. Meta 3 and possibly 4 guns, tank, missile launchers etc. Some PI materials, but this market is volatile. Higher end minerals when the margin is good.

High Capital (> 1bil): You have a choice between high price/low volume items, or low price/very low margin/high volume items. To be honest I don't have a ton of experience above this level, but volume and liquidity become your major challenges here. Your profit margins are squeezed, so good trade skills are a must. Minerals, pos fuel and ice products are good markets to be in. Also, acquiring material becomes more important. Perhaps look for corps/alliance doing heavy t2 production and purchase bulk mods and/or ships.


Liberty Eternal
Posted - 2011.02.05 22:07:00 - [10]
 

Lashmar, it doesn't matter where you start or what you do. Just find some markets and start moving your capital through them. Aim to increase velocity, volume and profit margin to the maximum, while keeping complexity, workload and risk to the minimum.

Mar Lee
An Army of None
Posted - 2011.02.06 01:08:00 - [11]
 

Originally by: Mestophoclies
Sit in Jita, place buy orders, buy stuff, then re-list it on sell orders. Profit comes from the margin. Don't forget to factor in taxes and broker fees in your margin calculations. Good trade skills help a lot, especially the ability to manage a large number of orders, and broker fees, etc. When your margins shrink, fractions of percentages become more relevant.


Adding to this: if you have a trader sitting in Jita 4-4, you'll want to get his Caldari Navy standings up. It'll reduce the broker fee by a fraction, but like Mest says, when you're dealing with high-volume, low-margin goods, that fraction starts to become important.

Babyface Eighteen
Posted - 2011.02.06 01:41:00 - [12]
 

My tips:

Time is money!

If you go the station trader route. Spend your time on the items that give you the most profit. 80/20 anyone? 20% of the items you trade will be 80% of your income. So no need to screw around with low margin products.

And margins change! (Obv) One day you sit and laugh while your pushing fast moving product with 50% margins, the next day you sit and stare at a negative margin on the same item.

Hauling I just do if I find it profitable to go and make x and sell it to overpriced buy orders. But again, time is money. And even if you can make thoose x and earn 100mill, it will take time to do so. Time you could spend in the market making even more.


AtheistOfFail
AoF Lottery Services
Posted - 2011.02.06 02:18:00 - [13]
 

2 things
1) Amarr/Dodixie (your choice)
2) Amarr ships/weapons/tanks or Gallente ships/weapons/tanks (based on number 1)

Expand from there to common modules (damage control, warp disruptors, warp scrambler, yadayada)

TipsyMcStagger
Caldari
Spruillo WarDec Corp
Posted - 2011.02.07 03:11:00 - [14]
 

Edited by: TipsyMcStagger on 07/02/2011 03:51:53
Originally by: Lederstrumpf


Originally by: Lashmar
Also, how does market manipulation work?


1.) Become a [quasi] monopolist
2.) Dictate the price / influencing it to go up or down.




Realize too that its a lot easier to wreck a market than build it back up, so use manipulation sparingly in its most common form, punishing/reforming/educating/running off individuals who get out of line and stay there.

Many new yahoos will look at local sells instead of basing buys on jita buys and this may work for station-limited high volume stuff but is usually bad idea for region-wide buys on pricier slower moving stuff.

These same new guys usually throw up a buncha orders cutting margins in half, isk'ing mils at a time, etc, then they get frustrated and leave after a day when all their orders arent magically filled.

The ones who stick with it can however be reformed and educated.

I dumped 10 occators 1B worth on 1 yahoo after he 5m isked buys up to jita sells, waited till the next morning, sure enough they where on sells for well over 100m, then I slowly stuck up the 3 extra I had for the lesson and removed all margin down even with jita, close to what I sold them to him. A few lemmings followed me down of course which is always helpful

At regional movement of 2-3 a day, with a dozen or so now down to jita, he will be stuck with them until he dumps them somewhere.
And sure enough, his ridiculous buys for 10 are now politely following the .01 isk game at a safe -25% jita buys. I made 80m off the 10 I dumped. My lesson fees.

Gei'neille
Paragon Capital Group
Posted - 2011.02.07 03:46:00 - [15]
 

Edited by: Gei''neille on 07/02/2011 03:49:08
I've created a fairly simple spreadsheet that helps me to make sure that I take taxes and broker fees into account so I can make a profit and decide if a trade is worth it or not.

TradingCalc

It may help you in your quest to become a trade god.

Turzyx
Dreddit
Test Alliance Please Ignore
Posted - 2011.02.07 09:49:00 - [16]
 

Here’s my brain dump:

If you’ve got 800 million to play with, opportunity cost will be a large factor in determining your ability to trade effectively. It is quite easy to get all your liquid tied up in assets which you cannot shift. For this reason, do not be afraid to sell to buy orders, but do not rely on them – I nearly lost a significant amount on Consumer Electronics the other day because the Jita price crashed by 1k after I bought 50k units.

Never pay more for an item than it is actually worth. Conversely, never sell an item for less than it is worth unless you need the liquid and are still making a profit.

Try to profit from other player’s manipulations. For example, if someone manipulates the price of a high movement item upward, do some inter-region trading to benefit, but be aware this is high risk.

If you need to haul, never do it AFK and fit a light tank. A mammoth with 3 cargo rigs, 4 cargohold expander IIs has 27k m3 capacity. Fit 3 MSE IIs and 2 Invulnerability Field IIs and it has ~18k EHP and is easy to skill up for.

Always take into account transaction tax and broker fees.

There are plenty of ‘bread and butter’ trades where you can make 2-10 million for a dozen jumps. This is often too small fry for other people but it can keep you motivated when times are slow, even though the return is quite small.

Lashmar
Posted - 2011.02.07 11:43:00 - [17]
 

Thank you again to everyone that has taken the time to post. It’s been very interesting to read everyones personal experiences, and there are a lot of gems of information within this thread now.

Its interesting about volumes – I always used to assume that you need about a 10% margin between the buy and sell price in order to turn a profit, but on actually trying out trading the margin can be a lot lot smaller. For those that want to begin trading, work out how small the margin can be and don’t be afraid to shrink to those low margins – there’s more risk involved, but with the right volumes you can keep your isk fairly liquid.

Thank you also for the post regarding market manipulation. It is an interesting idea, but perhaps I will save it for when I am more experienced and have a few bil or more I don’t mind tying up for months. It seems to be more of a long term plan rather than anything short term.

Thank you again for the advice everyone. I appreciate it, and hopefully this thread can be a location to point other aspiring traders to in future as well.

Hallan De'estus
Posted - 2011.02.07 15:48:00 - [18]
 

Station traders often succeed or fail by working the margins. The rock-bottom baseline for any trader is tax rate + broker fee.

If you intend to wheel-and-deal with the big or mid-sized traders you MUST work on three things:
- Accounting & Broker Relations V
- Social & Connections V
- Standings with the NPC owning the station

Unless / until your trading margin approximates the margins of the other traders, they will win any and every time you go head-to-head.

Tasko Pal
Aliastra
Posted - 2011.02.07 16:19:00 - [19]
 

Edited by: Tasko Pal on 07/02/2011 16:50:03
Originally by: Hallan De'estus
The rock-bottom baseline for any trader is tax rate + 2*broker fee.


FIFY. You got to buy and sell. Each time you get dinged for the brokerage fee (times two, because you're station trading). But tax rate only hits when you sell.

Edit: connections 5 isn't so important. It doesn't contribute to lowering your brokerage fees. Does help with refining though.

Neyri
Posted - 2011.02.08 04:30:00 - [20]
 

I've been station trading for about 3 weeks now (yeah I know I'm still a noob) and found that t1 ammo sells pretty quickly, since it's in demand by mission runners and pvpers and pretty much anyone who uses a gun. I've since tried dabbling in t2 modules with some good success so far, managed to make 10mil in one night with them onceLaughing. My lack of capital gets in the way sometimes when I see a good market but that's how things are sometimes.

If I was going to give some advice I'd probably say to tie up your isk in buy orders. It's nice to have some liquid isk for when you see a good deal or need to buy a ship or something, but there's no sense keeping large amounts in your wallet where it isn't working for you.


Companion Qube
Minmatar
Electron Conservation Inc
SRS.
Posted - 2011.02.08 11:46:00 - [21]
 

Edited by: Companion Qube on 08/02/2011 11:47:04
Originally by: Tasko Pal
Edit: connections 5 isn't so important. It doesn't contribute to lowering your brokerage fees. Does help with refining though.

Double check that - the last time I looked it didn't affect refining at all. Brokers fees and refining tax have been based on base (un-modified) standing for as long as I can remember.

Connections will come in handy when you decide to ***** yourself out for corp and faction standing, as will Social V.

Tasko Pal
Aliastra
Posted - 2011.02.08 16:21:00 - [22]
 

Originally by: Companion Qube
Edited by: Companion Qube on 08/02/2011 11:47:04
Originally by: Tasko Pal
Edit: connections 5 isn't so important. It doesn't contribute to lowering your brokerage fees. Does help with refining though.

Double check that - the last time I looked it didn't affect refining at all. Brokers fees and refining tax have been based on base (un-modified) standing for as long as I can remember.

Connections will come in handy when you decide to ***** yourself out for corp and faction standing, as will Social V.


I (as Tasko Pal) have perfect refining with 18 corps, but raw standing is usually a bit over 6. My connections skill is at 4 which brings the overall standing to at least 6.67.

Hallan De'estus
Posted - 2011.02.08 17:12:00 - [23]
 

Edited by: Hallan De''estus on 08/02/2011 17:29:34
<laughing>

Tasko I stand corrected. Thanks for catching that awful omission! Never post when you have the flu and have yet to drink your 2nd cup of coffee... Laughing

About Connections... my bad for not adding the justification: Connections provides that lovely boost to standing, both NPC Corp and NPC Faction. Both of those standings factor into the equation by which the broker in the NPC station sets your broker fee.

Some clever folks have been able to approximate that equation. If I can track down that thread I'll post here in a day or three.

EDIT: Comments / opinions welcome!

Linkage

Linkage

Tasko Pal
Aliastra
Posted - 2011.02.08 18:18:00 - [24]
 

Originally by: Hallan De'estus


About Connections... my bad for not adding the justification: Connections provides that lovely boost to standing, both NPC Corp and NPC Faction. Both of those standings factor into the equation by which the broker in the NPC station sets your broker fee.


The thing is, the connections skill doesn't directly lower your brokerage fees. Those are based on raw corp and faction standing. As I noted, it does help improve refining (at least till you get 6.67 corp standing, adjusted) and it allows you better access to agents which more quickly allows you to raise standing with a corp and faction. That's why I suggested not bothering with connections 5. The justification for onnections 4 is rather weak too, but I think connections 3 is entirely justified given the low cost of getting that skill to that point.

Rogueresearch
Posted - 2011.02.08 18:55:00 - [25]
 

Margin Trading is the most awesome skill there is for a trader.


 

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